Horizons - how far ahead do you look?

With the increased uncertainty generated out of the back of the credit crunch confidence has wained; consequently horizons have shortened, this has made business much more reactionary. Part of a good Sales and Operations planning process is to review horizons, leadtimes, confidence factors and perspectives (on market conditions), amongst many others. Where is your attention focussed? Is it weeks 5 to 8, or 9 to 13 or are you primarily focussed on next months plan? If you look at forecast accuracy, latency and lag, which is the most stable and which is most accurate in terms of forecast horizon? For example try taking a look across your forecast accuracy by item by location to see which week is typically the most accurate both as a raw forecast and as an adjusted forecast. From the work I did with a client recently the more accurate statistical forecasts seemed to be weeks 6 to 8 and the adjusted forecasts were weeks 4 to 6. On thinking this through with the client we came to the conclusion that currently they were being very reactive in market activity and execution. The planned horizon focus should have been 9 to 13 with refinement weeks 5 to 8, however the reality was the focus was weeks 3 - 6 and the effect was activity in the short term. They were effectively generating a lot of their own noise! On re-tuning the process to get them to focus a little further out, marketing activity stabilised, statistical forecasts returned to previous levels of reliability and adjustments became more reasonable. Are you generating your own noise? How far out are you thinking and planning? What are your horizons of confidence? Why not discuss it in your next S & OP meeting - I think you may be surprised?

Disclaimer: Blog contents express the viewpoints of their independent authors and
are not reviewed for correctness or accuracy by
Toolbox for IT. Any opinions, comments, solutions or other commentary
expressed by blog authors are not endorsed or recommended by
Toolbox for IT
or any vendor. If you feel a blog entry is inappropriate,
click here to notify
Toolbox for IT.